Zerodha G-Sec Yield

Indicative yield on G-Secs

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Indicative yield is the estimated yield-to-maturity that Zerodha displays for each G-Sec / T-Bill / SDL in the Bids window before the RBI auction.

TermMeaning
Indicative yieldEstimated YTM based on prior auctions and current market
Cut-off yieldActual yield determined by RBI auction (binding)

How they differ

  • Indicative: A forecast, displayed pre-auction so investors can plan.
  • Cut-off: Actual yield set when RBI completes the auction; what you receive.

Typically the cut-off is close to the indicative (within 5-10 bps), but volatile rate environments can see larger gaps.

Why this matters

Your effective return depends on the cut-off, not the indicative. If indicative is 7.20% but cut-off comes in at 7.10%, you get 7.10%.

For retail (non-competitive) bids, you accept the cut-off regardless. For competitive bids (institutional), you specify your yield and may not get allotted.

See also

External references

References

  1. RBI, Non-competitive bidding scheme, rbi.org.in.
  2. Zerodha, G-Sec indicative yield methodology, support.zerodha.com.

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